The talking-heads remain stuck in repeat mode over European PMIs and how that means the hot-money should be buying peripheral stocks with both hands and feet; but as we discussed in detail here, relying the "rough" survey-based PMI data as an indicator of future economic strength is a mistake [6]. With transmission mechanisms gummed up, hope is not enabled to translate into activity and overnight we got confirmation of that sad new reality from Italy (which saw its GDP miss expectations, shrinking by more than expected), and France (which saw Industrial Production miss expectations topping the worst 3 month slide in 10 months). It seems once again that faith does not triumph over reality and Europe is indeed stuck in the quagmire that unemployment rates, loan delinquencies, and credit creation would suggest. Of course, we are sure we'll be told to wait just another quarter for the hope to filter into reality... just keep waiting, and hoping.
Worst 3 months for French IP in 10 months...
[7]
but but but PMI said it was all good...
and Italian GDP growth missed expectations for the 9th of the last 10 quarters - even as PMI surges...
[8]
Charts: Bloomberg